Even though your office policy probably requires patients to pay for any charges that are not billed to insurance, odds are good you have some significant balances due on the non-insurance side of your ledgers. Here is a look at the best techniques to collect amounts due long after the patient has left your office.
The new goal
Once you classify a patient's debt as past due, the immediate goal is for a staff member in your practice to speak to him or her over the phone. Speaking to the patient in person is the key to better collections, but there are two big factors working against this goal.
In spite of those obstacles, real money is at stake and the services have already been provided, so the time spent on collection is well worth the effort. And the chances of successful collection are best if you make a personal connection with the debtor and appeal to his sense of fairness. You want to call upon your past strong relationship and use the fact that the patient will need you again in the future. The best way to do that is for the patient to speak directly to a staff member over the phone.
Overcome the two factors above by choosing a very good employee and meeting with her frequently to monitor the status of accounts receivable. An office manager should play an important role in this effort. The reluctance of the debtor to take phone calls can be worn down by repetition. If your staff member continues to leave messages day after day, it may become embarrassing (and annoying) and the patient may eventually answer or return the call. Once the patient realizes that you are not going to let the matter drift, he will be more likely to respond. But let a week or two pass between communications and the debtor realizes that he can easily ignore the bill.
What to say
When your collections manager finally speaks to the debtor over the phone, it is best to take a friendly exploratory approach at first. Many past due debts are because the patient was not satisfied with the service or product. Additionally, it is quite possible that your office made an accounting or billing error. These issues must be resolved first and then you have a good chance of collecting.
The first step in the phone call is for your staff member to review the services and charges and see if the patient agrees that the amount is due. Once you have that confirmation, you simply remind the person that the balance is long past due and must be paid immediately. Try to take a credit card number over the phone or at least get a firm date when the amount can be paid. Try to collect the full amount of the balance, but if you have to make payment arrangements, try to get authorization to process a credit card at specific dates for three installments or accept three post-dated checks to hold and deposit.
Train your staff to be discreet about leaving messages with other household members or co-workers of the patient that reveal a past due debt. These are private matters and you should only speak to the debtor or guarantor.
Send statements and letters
Of course, since you can't always speak to the debtor by phone, have form letters ready to be customized and mailed which detail the past due amount and also continue to send regular statements with interest accruing every month. Letters may start out friendly and may get tougher if the debt is ignored. At some point you may threaten legal action, damage to the credit rating and the end of eye care services at your office.
It is extremely important to write down all the details and promises. Follow-up with another phone call and letter on the specific day something was due but did not happen. You must create the impression that your office does not forget.
Tempting to farm it out
Many doctors, managers and staffers hope to find another way to resolve the collections challenge and it's easy to understand why. My experience and that of many colleagues I've spoke with tell me that collection agencies don't usually work very well. I've also tried using a local attorney to send letters on law firm stationery with limited success. It is much easier for the patient to ignore a strange company he has no relationship with than to ignore your office staff. The best way to collect is to keep the task within your office.
Always comply with any state laws that may exist protecting the consumer in the collection process and which specify how you may apply interest. Check your state government website under consumer credit.
It is far better to prevent balances from getting to the accounts receivable ledger than it is to try to collect after the fact. Next week's tip will cover ideas for collecting in the office at the time of service and preventing unpaid insurance balances from going back to the patient.